A Novel Twist on the Basis Trade: Long Digital Asset Treasuries, Short Futures

The financial markets are continually on the lookout for the next major trade opportunity. For 2026, it is anticipated that this trade will involve a fresh take on traditional basis trades, where investors adopt a long position in Digital Asset Treasury companies (DATs) while taking a short position in futures. Sophisticated market players have previously achieved positive returns by implementing the long ETF, short futures strategy for bitcoin and ether. However, this new variation of the basis trade incorporates DATs and extends to a broader range of cryptocurrency projects commonly referred to as 'alts'. 2025 marked a significant year for Digital Asset Treasuries (DATs), which are typically publicly traded companies that issue and sell shares to purchase dedicated cryptocurrency assets. By doing so, they aim to increase their crypto tokens per share. This allows typical investors to trade, custody, and hedge DATs just like any other stock, eliminating operational complexities and regulatory uncertainties associated with managing native crypto assets. As a result, DATs are emerging as a crucial bridge between cryptocurrency markets and traditional finance. What makes DATs particularly powerful is their adaptability. These companies can deploy a wide range of treasury and yield strategies aimed at increasing their multiple to net asset value (mNAV). By maximizing token ownership on a per-share basis, DATs strive to outperform their underlying tokens. A notable example is Michael Saylor's strategy, which saw its stock price surge 22 times since it began buying bitcoin, while the digital asset itself appreciated nearly 10 times over the same period. However, volatility can work in both directions. Recent market fluctuations have led to some DATs retrenching, and their mNAVs have fallen. Despite the operational ease and regulatory clarity offered by this structure, many DATs remain inaccessible to numerous investors due to their volatility. To date, hedging options have been limited due to restrictions on Commodity Futures Trading Commission (CFTC)-regulated futures for most tokens. The missing piece: CFTC-regulated futures In traditional markets, futures contracts enable investors to lock in the future price of an asset. For centuries, futures have played a vital role in risk management, providing institutions with a means to hedge exposure, speculate on price movements, and scale efficiently. However, in the cryptocurrency space, regulated futures exist only for a small subset of tokens, such as bitcoin and ether. The lack of comprehensive cryptocurrency futures can be largely attributed to former SEC Chairman Gary Gensler. During his tenure, Chairman Gensler asserted that most cryptocurrency assets were securities. As futures are derivatives of commodities, they would have fallen outside his jurisdiction, leading Gensler to suppress their launch and deprive investors of essential risk management tools. The landscape has shifted. With the U.S. administration's aggressive pursuit of making the U.S. the 'crypto capital of the planet,' new SEC Chairman Paul Atkins has made it clear through numerous public statements that 'most cryptocurrency tokens are not securities.' With this regulatory hurdle cleared, futures are now in the spotlight. These futures are not just standalone products but also serve as a gateway to broader market access. Through its generic listing standards guidance, the SEC has recently clarified that tokens with six months of futures trading can be more easily listed as ETFs, opening the door to institutional capital and mainstream adoption. As cryptocurrency futures become more liquid, the long DAT, short futures strategy becomes a viable option. The DAT Basis Trade A basis trade involves an investor buying an asset in the spot market and simultaneously selling a futures contract on the same asset, with the goal of profiting from the price difference – or 'basis' – between the two. 'Contango' occurs when future prices are higher than spot prices. Under this market condition, basis trade strategies tend to be profitable. DATs hold, stake, and even restake digital assets, earning real on-chain yield. By buying their stock, investors gain exposure to the cryptocurrency and its yield. By shorting the corresponding futures of the DATs' crypto holdings, investors can hedge away price swings in those assets. What remains is the spread between the future price of the token and the spot holdings of the DAT. When a DAT trades below its net asset value or when the future price of the token is higher than the DATs' spot crypto holdings, investors can earn a steady, relatively market-neutral return. While it is challenging to project the size of the basis, the differences for alts may be more pronounced than for other assets, driving a higher yield for investors. The potential upside is clear. When mNAVs are rising and futures are in contango, the DAT basis trade could generate compelling returns. However, like all strategies, there are risks and downside scenarios. Perhaps the most evident risk is a scenario where the mNAV decreases precipitously, and losses on the stock leg are not fully offset by the futures hedge. Additionally, DATs that trade at a discount to NAV may become attractive takeover targets. While this could erase losses by restoring mNAV, the acquirers could pivot to another asset class, necessitating an unwind of the trade. For those sensitive to these risks, ETFs, where mNAVs are designed to hold steady at par, may be preferred over DATs when executing a regulated basis trade. However, comprehensive alt ETFs, along with futures in the underlying asset, are just starting to emerge. In the interim, the bridge offered by DATs plays a crucial role in educating traditional investors about the possibilities as cryptocurrency investing becomes more mainstream. As regulated futures proliferate across alts, the long DAT, short futures trade could become an ideal way for Wall Street to capture cryptocurrency yields without touching a wallet or suffering from the intense volatility that defines cryptocurrency as an asset class. In 2026, it is anticipated that this will be the trade of the year.